USD/CHF establishes below 0.9600 as DXY weakens ahead of US PCE

  • USD/CHF is oscillating below 0.9600 as the US PCE Price Index is expected to fall to 4.9%.
  • The Fed is set to hike interest rates by 50 bps more than two times this year.
  • Next week, the Swiss economy will release GDP and inflation numbers.

The USD/CHF pair is oscillating near Thursday’s low at 0.9583 and a balance auction near the previous day’s low strengthens the bears as it dictates that the sentiment has not changed overnight and more downside could be displayed by the major. The asset has remained vulnerable for the last two trading weeks and a sheer downside move has been displayed after failing to sustain above the psychological resistance of 1.0000.

Despite the rising odds of a 50 basis point (bps) interest rate hike by the Federal Reserve (Fed), the US dollar index (DXY) has failed to sustain its glory. The DXY has been hammered sharply by the market participants as investors have discounted the fact that the monetary policy is going to remain tight this year and hopefully next year. The Fed has already provided clues that investors should brace for two more consecutive jumbo rate hikes to anchor the price pressures.

In today’s session, the focus will remain on the US Personal Consumption Expenditure (PCE) Price Index, which may tumble to 4.9% against the prior print of 5.2%.

On the Swiss franc front, next week is going to be a busy week for the market participants. The Swiss Federal Statistical Office will report the Consumer Price Index (CPI), which is seen at 2.8% against the prior print of 2.5% on yearly basis. Apart from that, the Swiss State Secretariat for Economic Affairs will release the Gross Domestic Product (GDP) numbers. The quarterly and yearly figures may improve to 0.7% and 4.9% respectively.


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